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Mortgages - Ireland - March 2014

"For the first time since the financial crisis occurred, there appears to be a match between demand and supply with respect to mortgages. Consumers are once again looking to take out mortgages to purchase property, while financial institutions once again seem genuinely interested in issuing mortgage loans. Although lending criteria remain tight, this is no bad thing if it ensures responsible and sustainable lending going forward."

- Brian O’Connor, Production Manager

Some questions answered in this report include:

  • What are mortgage ownership levels among Irish consumers?
  • What are Irish consumers' mortgage application intentions for the months ahead?
  • What are Irish consumers' general attitudes towards mortgages and mortgage-related issues?

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Table of contents

  1. Introduction

      • Key themes in the report
        • Data Sources
          • Definitions
            • Abbreviations
            • Executive Summary

                • The market
                  • Figure 1: Value of outstanding mortgage debt, € billion, RoI and NI, 2009-13
                • Forecast
                  • Figure 2: Index of value of outstanding mortgage debt, forecast and projected, 2009-18
                • Market factors
                  • Signs of recovery in NI and RoI property markets
                    • Extremely high rate of arrears among RoI mortgage accounts
                      • FTBs benefitting from greater affordability and prudence
                        • Increased first-time buyer volume and value in NI, but down in RoI
                          • Increased volume and value of mover purchase mortgages
                            • Companies and Innovations
                              • The consumer
                                • Relatively high mortgage penetration among Irish consumers
                                  • Figure 3: Ownership of a mortgage, RoI and NI, January 2014
                                • One in five NI and 14% of RoI consumers have mortgage intentions for 2014
                                  • Figure 4: Consumer intentions to apply/re-apply for a mortgage within the next 12 months, RoI and NI, January 2014
                                • NI consumers slightly more positive about mortgage prospects
                                  • Figure 5: Agreement with statements relating to current situation, RoI and NI, January 2014
                                • Preference for dealing with bank rather than broker or adviser
                                  • Figure 6: Agreement with statements relating to arranging a mortgage, RoI and NI, January 2014
                                • Preference for lower interest over no arrangement fee
                                  • Figure 7: Agreement with statements relating to arrangement fees, RoI and NI, January 2014
                                • Fixed rate mortgages more popular among NI consumers
                                  • Figure 8: Agreement with statements relating to fixed rates, RoI and NI, January 2014
                                • Little enthusiasm for switching providers
                                  • Figure 9: Agreement with statements relating to switching mortgage provider, RoI and NI, January 2014
                                • One in ten hopes to make overpayments on their mortgage
                                  • Figure 10: Agreement with statement, 'I am planning to make overpayments on my mortgage during the next 12 months', RoI and NI, January 2014
                                • What we think
                                • Issues in the Market

                                  • What are mortgage ownership levels among Irish consumers?
                                    • What are Irish consumers' mortgage application intentions for the months ahead?
                                      • What are Irish consumers' general attitudes towards mortgages and mortgage-related issues?
                                      • Trend Applications

                                          • Trend: Return to the Experts
                                            • Trend: Prepare for the Worst
                                              • Trend: Why Buy
                                              • Market Overview

                                                • Key points
                                                  • Signs that property prices have bottomed-out and are set to rise
                                                    • Figure 11: Residential property price index, RoI, 2005-2014*
                                                  • Rental yields in RoI back to a level to attract investors
                                                    • Figure 12: Gross rental yields, by region, RoI, Q4 2013
                                                  • Growing interest among RoI consumers in buying a house
                                                    • Figure 13: What are consumers saving for, RoI, February 2013 and February 2014
                                                  • Mortgage arrears remain a major problem in RoI
                                                    • Figure 14: Mortgage accounts in arrears for more than 90 days, principal dwelling house, RoI, September 2009 – December 2013
                                                  • Unemployment not the main cause of mortgage arrears
                                                    • 27% of buy-to-let mortgages in RoI are currently in arrears
                                                      • Figure 15: Buy-to-Let mortgage accounts, by arrears category, RoI, Q4 2013
                                                    • Almost 85,000 PDH mortgage accounts have been restructured in RoI
                                                      • Figure 16: Restructured PDH mortgage accounts, by restructure type, RoI, Q4 2013
                                                    • Arrears and repossessions in UK declining – but not in NI
                                                      • Figure 17: Mortgage arrears of at least 2.5% of mortgage balance, UK, 2011-2013
                                                    • Affordability higher in NI than elsewhere in UK
                                                      • Figure 18: Average first-time buyer loan amount, UK, Q4 2013
                                                      • Figure 19: Multiples of income borrowed by FTBs on average, UK, Q4 2013
                                                    • Average FTB mortgage loan amount down 37% from peak in RoI
                                                      • Figure 20: Average mortgage loan amount, first-time buyers, RoI, 2005-2013
                                                    • Concerns over interest-only mortgage shortfall in NI
                                                    • Competitive Context

                                                      • Key points
                                                        • NI rents on the increase, adding impetus to desire to buy
                                                          • Figure 21: Rent by property type, Quarterly change, NI, Q2 2013
                                                          • Figure 22: Monthly rent by property type, £, NI, Q2 2013
                                                        • Rents in RoI also increasing – particularly in Dublin
                                                          • Figure 23: Rental index, RoI, 2004-2014*
                                                          • Figure 24: Private residential rents, Year-on-year % change, by area/region, RoI, January 2014
                                                      • Market Size and Forecast

                                                        • Key points
                                                          • All-Ireland mortgage market up marginally on 2012
                                                            • Figure 25: Value of outstanding mortgage debt, All-Ireland, RoI and NI, actual, forecast and projected, 2009-2018
                                                          • RoI caused most of the value drop in the mortgage market
                                                            • Moderate growth expected during 2014-2018
                                                              • Figure 26: Value of outstanding mortgage debt, All-Ireland, RoI & NI, forecast and projected, 2009-2018
                                                            • Mortgage loan volumes up in NI but down in RoI in 2013
                                                              • Figure 27: Total number of loans advanced for house purchase, NI, Q1 2012-Q4 2013
                                                            • Slight decline in number of mortgages issued in RoI in 2013
                                                              • Figure 28: Total number of mortgage loans, RoI, Q4 2011-Q4 2013
                                                            • Volume of mortgages since boom years down by 93% in RoI
                                                              • Figure 29: Volume of mortgage loans issued, RoI, 2005-2013
                                                            • Value of mortgages up 10% in NI, down 5% in RoI in 2013
                                                              • Figure 30: Total value of loans advanced for house purchase, NI, Q4 2012 – Q4 2013
                                                            • Almost €2.5 billion in mortgage loans issued in RoI in 2013
                                                              • Figure 31: Total value of mortgages issued, RoI, Q4 2011-Q4 2013
                                                            • Value of mortgages issued in RoI down 5% since peak
                                                              • Figure 32: Value of mortgage loans issued per year, € million, RoI, 2005-2013
                                                          • Segment Performance

                                                            • Key points
                                                              • First-time buyer activity up in NI in 2013, but down in RoI
                                                                • Figure 33: Number of mortgages issued to first-time buyers, NI, Q1 2012-Q4 2013
                                                                • Figure 34: First-time buyer mortgages, total value, NI, Q1 2012-Q4 2013
                                                              • FTB loans down in volume and value in RoI
                                                                • Figure 35: Number of FTB loans issued, RoI, Q4 2011-Q4 2013
                                                                • Figure 36: Value of FTB loans issued, RoI, Q4 2011-Q4 2013
                                                              • Volume and value of mover purchase mortgages increase in NI and RoI
                                                                • Figure 37: Number of mortgages advanced to home movers, NI, Q1 2012-Q4 2013
                                                                • Figure 38: Value of mortgages advanced to home movers, NI, Q3 2012-Q4 2013
                                                              • RoI home mover mortgage segment up 8.5% in volume and 9.8% in value
                                                                • Figure 39: Volume of mover purchase loans issued, RoI, Q4 2011-Q4 2013
                                                                • Figure 40: Value of mover purchase loans issued, RoI, Q4 2011-Q4 2013
                                                              • Volume steady – but value down – in buy-to-let segment
                                                                • Figure 41: Volume of Residential Investment Letting loans issued, RoI, Q4 2011-Q4 2013
                                                                • Figure 42: Value of Residential Investment Letting loans issued, RoI, Q4 2011-Q4 2013
                                                                • Figure 43: Value of residential investment letting loans issued, per annum, RoI, 2006-2013
                                                            • Strengths and Weaknesses

                                                              • Strengths
                                                                • Weaknesses
                                                                • Companies and Innovations

                                                                  • Key points
                                                                    • Innovations
                                                                      • AIB and IMHO homeowners in difficulty initiative
                                                                        • Approved Mortgage Corporation App
                                                                          • Halifax to pay first-time buyer stamp duty
                                                                            • Company profiles
                                                                              • Allied Irish Bank (AIB)
                                                                                • Bank of Ireland
                                                                                  • Danske Bank
                                                                                    • Halifax
                                                                                      • HSBC
                                                                                        • KBC Bank Ireland
                                                                                          • Nationwide
                                                                                            • Permanent TSB
                                                                                              • Santander Group
                                                                                                • Ulster Bank
                                                                                                • The Consumer – Ownership of Mortgages

                                                                                                  • Key points
                                                                                                    • More than a third of all Irish consumers have a mortgage
                                                                                                      • Figure 44: Ownership of a mortgage, RoI and NI, January 2014
                                                                                                    • Ownership highest among consumers aged 35-44
                                                                                                      • Figure 45: Ownership of a mortgage, by age, RoI and NI, January 2014
                                                                                                    • Work and social status have big impact on mortgage ownership
                                                                                                      • Figure 46: Ownership of a mortgage, by work status and socio-economic background, RoI and NI, January 2014
                                                                                                    • Majority of mortgage owners are repaying capital and interest
                                                                                                      • Figure 47: Type of mortgage owned, RoI and NI, January 2014
                                                                                                    • RoI consumers on variable/tracker rates; NI consumers on fixed rates
                                                                                                    • The Consumer – Mortgage Application Intentions

                                                                                                      • Key points
                                                                                                        • Fairly strong mortgage intentions (particularly in NI)
                                                                                                          • Figure 48: Consumer intentions to apply/re-apply for a mortgage within the next 12 months, RoI and NI, January 2014
                                                                                                        • Strongest activity likely to come from first-time buyers
                                                                                                          • Similar activity from homeowners looking to move
                                                                                                            • Surprisingly strong interest in investing in property
                                                                                                            • The Consumer – Attitudes towards Mortgages

                                                                                                              • Key points
                                                                                                                  • Figure 49: Agreement with statements relating to mortgages, RoI and NI, January 2014
                                                                                                                • Less optimism about personal financial situation among RoI consumers
                                                                                                                  • Figure 50: Agreement with statements relating to current situation, RoI and NI, January 2014
                                                                                                                • Slight preference for dealing with bank rather than broker or adviser
                                                                                                                  • Figure 51: Agreement with statements relating to arranging a mortgage, RoI and NI, January 2014
                                                                                                                • Consumers have long-term perspective on mortgage costs
                                                                                                                  • Figure 52: Agreement with statements relating to arrangement fees, RoI and NI, January 2014
                                                                                                                • Fixed rate mortgages more popular among NI consumers
                                                                                                                  • Figure 53: Agreement with statements relating to fixed rates, RoI and NI, January 2014
                                                                                                                • Consumers not so keen on switching providers – even with an incentive
                                                                                                                  • Figure 54: Agreement with statements relating to switching mortgage provider, RoI and NI, January 2014
                                                                                                                • One in ten intent on making overpayments on their mortgages
                                                                                                                  • Figure 55: Agreement with statement, 'I am planning to make overpayments on my mortgage during the next 12 months', RoI and NI, January 2014
                                                                                                              • Appendix

                                                                                                                • NI Toluna data
                                                                                                                  • Figure 56: Ownership of a mortgage, by demographics, NI, January 2014
                                                                                                                  • Figure 57: Type of mortgage owned by consumers, by demographics, NI, January 2014
                                                                                                                  • Figure 58: Consumer intentions to apply/ re-apply for a mortgage within the next 12 months, by demographics, NI, January 2014
                                                                                                                  • Figure 59: Agreement with statements relating to mortgages, by demographics, NI, January 2014
                                                                                                                  • Figure 60: Agreement with statements relating to mortgages, by demographics, NI, January 2014 (continued)
                                                                                                                  • Figure 61: Agreement with statements relating to mortgages, by demographics, NI, January 2014 (continued)
                                                                                                                • RoI Toluna data
                                                                                                                  • Figure 62: Ownership of a mortgage, by demographics, RoI, January 2014
                                                                                                                  • Figure 63: Type of mortgage owned by consumers, by demographics, RoI, January 2014
                                                                                                                  • Figure 64: Consumer intentions to apply/ re-apply for a mortgage within the next 12 months, by demographics, RoI, January 2014
                                                                                                                  • Figure 65: Agreement with statements relating to mortgages, by demographics, RoI, January 2014
                                                                                                                  • Figure 66: Agreement with statements relating to mortgages, by demographics, RoI, January 2014 (continued)
                                                                                                                  • Figure 67: Agreement with statements relating to mortgages, by demographics, RoI, January 2014 (continued)

                                                                                                              Companies Covered

                                                                                                              To learn more about the companies covered in this report please contact us.

                                                                                                              Mortgages - Ireland - March 2014

                                                                                                              £1,095.00 (Excl.Tax)